Despite Uber's massive growth, it is still facing intense competition from rivals such as Lyft and Sidecar. This is all good news for taxi riders who will benefit from Uber's sharp price cuts. However, it's not just Uber customers who will gain financially from the announcement.

The disruptive ride-sharing company said it will also be guaranteeing drivers greater pay despite falling fares.

Uber said in a blog post:

In the past, Uber has implemented price cuts without a guarantee for drivers. However, this time around, we’re trying a new approach. We’re so confident in the earnings gains drivers will see that we’re making earnings guarantees in every city where we’re cutting prices. We feel that it is important for drivers to have this kind of certainty and comfort going into a price cut.

The 48 cities are all in the US and are, according to Uber, those that haven't yet benefitted from lower prices. Some of the more notable markets include Denver, Cincinnati, Cleveland and Salt Lake City.

Uber used two case studies to support its promise that it can cut prices and increase drivers pay at the same time. The first is Chicago, where it said fares had dropped 23 per cent but drivers are making 12 per cent more in fares per hour.

New York also got a mention, where prices have been falling for three years, but drivers are said to be earning significantly more per hour. The announcement will be a good news story for the San Francisco-based startup after it suffering a fresh blow at the hands of regulators in China.

In a statement to the Financial Times, the director of Beijing's traffic enforcement unit Liang Jiangwei said: "The use of unlicensed taxis by internet hailing apps violated a ban on illegal taxis." This effectively means Uber in now banned in China.